Adding Value to Program Integrity

July 30, 2020 by Robert M. Finlayson III

Adding Value to Program Integrity

In November 2019, the Centers for Medicare & Medicaid Services (CMS) estimated 14.9% of all federal Medicaid expenditures, a total of $57 billion, were improper payments – payments “did not meet statutory, regulatory, administrative, or other legally applicable requirements.” This represents a substantial increase over CMS' estimates in 2018 of $36.25 billion or 9.79%. Now, in 2020, COVID-19 is putting unprecedented pressure on Medicaid agencies as more people become eligible and agencies relax regulatory requirements to address a very real public health crisis. With Medicaid agencies under intense pressure to provide immediate necessary relief to members and providers, state program integrity operations face what may be the most challenging time in history to protect their programs.

To try to combat improper payments, federal regulation requires all states, the District of Columbia, and all U. S. territories to have a program integrity operation in place within their Medicaid programs. Recent regulation also requires Medicaid Managed Care Organizations (MCO) to beef up their program integrity operations to perform more like the states. Further, CMS is requiring states to modernize their Medicaid Management Information Systems (MMIS) into a modular approach (now called the Medicaid Enterprise System (MES)) with an emphasis on best-in-breed technology in each module. CMS has identified 15 “checklists” that are applicable to the modules within the MES, one of which is program integrity.

The Problem With Program Integrity Solutions

As Medicaid agencies implement and upgrade their systems to meet these requirements, it is critical they pay special attention to their program integrity functionality. In the past, program integrity solutions have focused on Medicaid claims analysis within their Surveillance and Utilization Review (SUR) and Fraud and Abuse Detection (FAD) subsystems. This involves “big data” analysis of millions of Medicaid claims in an effort to identify aberrancies that may indicate an improper payment or poor quality of care. The failing of these solutions, in addition to not having sufficient analytic power to correctly identify aberrancies in the data, is that they lack any meaningful case management and automated workflow in order to effectively investigate the aberrancies that are identified.

The Case Management Alternative

Recent requests for information and proposals by states, however, have specifically requested more information about case management. State leaders overseeing program integrity have recognized the lack of functionality in their solutions and are looking to the technology market to see what it can offer.

Moving forward, case management has to not only help the state meet federal regulation requirements, but also provide a meaningful solution that will add true value to their operations. Case management solutions must be configured to meet the requirements of 42 CFR 455 and 456 including:

  1. Methods and criteria for identifying suspected fraud cases
  2. Methods for investigating these cases that:
    1. Do not infringe on the legal rights of persons involved
    2. Afford due process of law
    3. Include procedures, developed in cooperation with state legal authorities, for referring suspected fraud cases to law enforcement officials
    4. Conduct “preliminary investigation” if the agency receives a complaint of Medicaid fraud or abuse from any source or identifies any questionable practices
    5. If fraud (or abuse) is suspected, refer to the MFCU for “full investigation”
  3. Safeguards against unnecessary or inappropriate use of Medicaid services and against excess payments
  4. Assessments of the quality of those services through review of services provided
  5. Provisions for the control of the utilization of all services provided

Key Program Integrity Functions

In order to meet these criteria, case management platforms must seamlessly integrate with powerful healthcare analytics platforms to enable clean, easy to use workflows between three key functions: identification, investigation, and adjudication.

Identification: Powerful, state-of-the-art healthcare analytics platforms provide the tools necessary for the program integrity team to identify improper payments in both post-pay and pre-pay scenarios. These platforms also can perform continuous eligibility analytics to constantly ensure only eligible recipients receive benefits and only eligible providers are paid. Effective platforms limit false positives, dive deep into multiple data sources, and correctly identify leads for investigations and review teams to follow up on.

Investigation: Once a lead is identified, there has to be a clean hand off to effective case management to “take it from here.” Without this key component, a bunch of leads are just the “dog who’s finally caught the fire truck!” Now what?

Effective case management must be able to deal with a broad spectrum of investigative processes including case intake, decision to investigate, case assignment, intake of evidence, process tracking, referral to another authority, and reporting. It has to be continuously configurable to allow for the ever-changing environment of agency, regulatory, and statutory business requirements and to be easily modified within the solution’s business processes. This is a tall order considering the rate at which state legislative mandates and federal regulations change.

Finally, the case management solution needs to allow for a clean and easy hand off to the final function, adjudication.

Adjudication: Awesome identification and superb investigations must have effective adjudications in order to win. In all my years of working in the program integrity field, I have never encountered a provider that just gave up and wrote a check when we sent him a demand letter (unless we under-valued the recovery)!

Case management platforms must be able to deal with the final aspects of any case: appeals, recovery, and closure. While every adjudication process is different, they are all driven by specific events and they rely on accurate collection of important data. Every case for adjudication includes a respondent, an issue or problem that requires resolution, and a basis or guideline against which any appeal is made. Case management platforms must be able to be configured to support all types of adjudication processes and be tailored to match specific agency, regulatory, and operations business requirements.

Don’t settle for a solution that doesn’t make your life easier throughout your operation. In reviewing your options, make sure that whatever solution you consider adds real value to each of the critical areas: identification, investigation, and adjudication. Effective case management is one way to integrate each area and help protect your program.


Robert M. Finlayson, III is a senior business development executive for Tyler. Formerly the Inspector General for the Georgia Department of Community Health, he has 30 years of experience in the investigation and administration of federal and state public assistance programs.

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